Perspectives Blog

Finding opportunity in Chinese reforms

Robert McConnaughey, Director of Global Research | June 16, 2014

…rging markets ahead of positive change where market uncertainty still exists. Chinese corporate level governance reforms may be fertile ground for undiscovered investment opportunities. The scope and pace of China’s reform will have significant influence on the global economy and should be monitored closely. I spent last week in China, meeting with corporate management teams, government officials and investors in the Chinese markets. One of my m…

Not all emerging markets are created equal

Robert McConnaughey, Director of Global Research | January 27, 2014

…ed their commodity windfall vs. those that did not. • Perhaps most importantly, countries undertaking structural reforms vs. those continuing to delay or backsliding on economic policy. Mexico is the poster child for positive economic reforms with the recent passage of fiscal reform and the watershed energy reform bill – easily the most important reforms the country has seen in decades. The Philippines and even much maligned Indonesia – with rece…

India’s new government fires investor enthusiasm

Natasha Ebtehadj, Fund Manager, Threadneedle International Limited | September 8, 2014

…l create investment opportunities not only in the domestic economy but also in sectors exposed to government-led reform. We believe the new government could enact much needed reforms to stimulate investment and unlock India’s economic potential. India’s economy has been weighed down in recent years by both political and economic problems, which have dragged growth substantially below its potential. Deterioration in the fiscal and external accoun…

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

…ities amidst pervasive pessimism as newly elected governments normally have a window to push through much needed reform. Polls in India, Indonesia and Brazil have shown pro-reform candidates (or in Brazil’s case anyone but the incumbent) gaining steam and have acted as a catalyst for these markets. In China we have seen an announcement of a mini stimulus as well as some SOE reform (Sinopec’s announcing the sale of its marketing division). As for…

What to expect from U.S. midterm elections

Robert McConnaughey, Director of Global Research | October 20, 2014

…2016 elections. One of the major issues for both parties to address between now and then is their stance on tax reform. Many observers believe that no room for compromise around tax and entitlement reform is likely before the presidential election. However, I do believe that the groundwork for discussion will begin to form and increasingly be a market focus. We noted a few weeks ago that “[w]hile there is clearly a wide political divide on key e…

Inversions and the growing scrutiny of corporate tax avoidance

Walter Colsman, Senior Equity Analyst | September 29, 2014

…ce will only grow from here. While there is clearly a wide political divide on key elements of comprehensive tax reform, there does seem to be some common ground. Republicans want to lower tax rates, but may be open to closing loopholes. Democrats want to raise tax revenues while eliminating perceived inequities. This would seem to leave the closing of loopholes as common ground for compromise. Therefore, while comprehensive tax reform is unlikel…

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

What’s behind the Japanese stock market’s recent correction? What’s ahead for Japan’s stock market, currency and government policy? Why the risk/reward tradeoff looks attractive at current price levels Abenomics has already had a bigger impact on the Japanese economy and financial assets than the failed attempt at quantitative easing between 2001 and 2006 (see chart). Inflation has moved back into positive territory, and household income is ri…